Problem 15-1 On January 5, 2017, Oriole Corporation received a charter granting
ID: 2406897 • Letter: P
Question
Problem 15-1 On January 5, 2017, Oriole Corporation received a charter granting the right to issue 5,200 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 46,600 shares of $10 par value common stock. It then completed these transactions. Jan. 11 Issued 20,300 shares of common stock at $16 per share. Feb. 1 Issued to Sanchez Corp. 3,600 shares of preferred stock for the following assets: equipment with a fair value of $48,600; a factory building with a fair value of $146,000; and land with an appraised value of $266,000. July 29 Purchased 2,000 shares of common stock at $17 per share. (Use cost method.) Aug. 10 Sold the 2,000 treasury shares at $14 per share. Dec. 31 Declared a $0.45 per share cash dividend on the common stock and declared the preferred dividend. Dec. 31 Closed the Income Summary account. There was a $163,400 net income. Record the journal entries for the transactions listed above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record entries in the order displayed in the problem statement. Round answers to 0 decimal places, e.g. $5,275.)
Explanation / Answer
Jan-11 Cash A/c (20300*16) Dr 324800 To Common Stock A/c (20300*10) 203000 To Paid In capital in excess of Par Value A/c 121800 (324800-203000) (Being 20300 shares having par value $10 per share issued at $16 per share) Feb-01 Equipment A/c Dr 48600 Factory Building A/c Dr 146000 Land A/c Dr 266000 To Preferred Stock A/c (3600*100) 360000 To Paid In capital in excess of Par Value A/c 100600 (Being preference shares issued against assets acquired from Sanchez Corp.) Jul-29 Treasury Stock A/c (2000*17) Dr 34000 To Cash A/c 34000 (Being 2000 shares repurchased at $17 per share) Aug-10 Cash A/c (2000*14) Dr 28000 To Paid In capital in excess of Par Value A/c (34000-28000) 6000 To Treasury Stock A/c 34000 (Being 2000 treasury stock reissued at $14) Dec-31 Income Summary A/c Dr 163400 To Retained Earnings A/c 163400 (Being net income transferred to retained earnings) Dec-31 Retained Earnings A/c Dr 37935 To Common Stock Dividend Payable A/c 9135 To Preferred Stock Dividend Payable A/c (3600*100*8%) 28800 (Being common stock dividend declared @0.45 per share and prefered stock dividedn declared) Initial Share Issued 20300 Less:Purchased treasury stock 2000 Add: Reissued Treasury stock 2000 Total shares at the end of the year 20300 Dividend per share 0.45 Total Dividend (0.45*20300) 9135 Shareholder's Equity Common Stock (20300*10) 203000 Preferred Stock (3600*100) 360000 Pain In Capital Excess of Par Value (121800+100600-6000) 216400 Retained Earnngs (163400-37935) 125465 Total Stockholders' Equity 904865